The legal requirement for a crofter to live on or near the croft brings with it a requirement for that crofter to have somewhere to live. This has long been recognised by both Westminster and the Scottish Government. Over the past thirty years, support has been available to meet this need but that support now requires rethinking if it is to meet today’s housing needs. To this end, the Scottish Government are currently seeking responses to its consultation on proposed changes to the Croft House Grant Scheme (CHGS). It is a consultation that many would argue is long overdue.
The Scheme aims to attract and retain crofters by enabling them to build (or improve) housing on their croft. That residency requirement has always been enshrined in the Crofting Acts. A crofter must be resident on, or within 32km, of their croft. This is currently a key driver of Crofting Commission policy. The consultation comes at a time when crofting legislation itself is being closely scrutinised by crofting law practitioners and parliamentary committees.
The current levels of support for the construction of a new house from the CHGS is £22,000 for a ‘high geographical priority area’, £17,000 for a standard priority and £11,500 for low priority. This prioritisation is largely based on the view that building on the islands and some of the more remote parts of the mainland is more expensive, therefore grants are increased accordingly.
To be eligible for the grant you must be a tenant crofter, a Kyles crofter or cottar (the meaning of the latter two is for another blog post). Tenants who have purchased and become owner-occupiers in the last seven years were supposed to be eligible, but this is currently uncertain – see my colleague Eilidh Ross Maclellan’s post on that subject.
The proposed changes increase the rates to £28,000 and £23,000 respectively for a High and Standard priority areas, and introduces just two geographical areas – Island and Non-Island. This change in geographical boundaries will mean an increase in support for some areas compared to the previous scheme, which will be good news for some. However, looking back to the CHGS’s predecessor, it is arguable that the proposals put forward in the consultation will still have little impact.
The previous Croft Building Grant and Loan Scheme (CBGLS) was introduced in 1986. Initially, the scheme contained a loan element – paid back to the Government over a period of time (typically 40 years), and a grant element.
It helped many crofters secure a home on their croft. (In fact, the house I grew up in was, largely, paid for by it. In 1986, my parents would have been some of the first people to build their house with assistance from the CBGLS). Back then, if you were frugal, the loan and grant could go a very long way. Nowadays, the amount offered might barely cover the cost of an average house kit.
The Scottish Crofting Federation recently gave their views on the matter, and highlighted some interesting figures. The average cost of building a house in 1986 was £27,860, and the CBGLS, on average, met 82% of building costs. However, over the years the level of support no longer increased with the rising cost of building a home. The loan element was withdrawn in 2004, and was not replaced with the introduction of the CHGS. The Federation calculated in 2008 that support was around 14% of total build costs.
The Shucksmith Report of 2008 stated that the support levels were too low, in an age where typical build costs exceeded £100,000 – a figure that has only increased. The only way that most crofters could raise the finance to build was to decroft, in order to obtain commercial lending. This remains the case. Currently, decrofted house sites are not eligible for grant support. However, the consultation proposes that decrofted houses linked to the croft would be eligible for support, as would ‘adjoining or adjacent’ land.
Another question the consultation poses is the size requirements of a house. It is currently the case that only houses of three beds or more will be eligible for funding – a rule that makes outdated assumptions about the size of a crofter’s family and does not give consideration that houses – like families – can grow and evolve over the years when time and finances allow. The current restriction looks short-sighted.
Any increase if of course welcome, however marginal it may be, but without the ability to obtain the support of a lender, the increase will make little difference, meaning decrofting will continue to be the only route for many. Most crofters are not in the fortunate position of being able to finance the building of a house without a mortgage. If one of the key aims of the Crofting Commission is to retain croft land in crofting tenure, and people working that land, then the Scottish Government may need to consider reintroducing a croft house loan, or, as suggested by the Scottish Crofting Federation, exert some pressure on commercial lenders to consider mortgage products for crofters. The latter may require a change in the law to facilitate mortgages over croft land.
The consultation closes on 31 March 2015 and can be found at http://www.scotland.gov.uk/Publications/2015/01/4893/0
Image Credit: Urban Realm: Highland Croft House completes